FAQs
Who pays the LOT for AIR? Isn't it primarily tourists?
Yes, visitors pay the majority of the tax. The tax varies by city—in Hailey, it applies only to rental cars and lodging. In Ketchum and Sun Valley, it is levied on items where state sales tax charges apply: lodging, short-term rentals, liquor by the drink, and retail purchases including building materials (groceries and gas are exempt).
Who will manage the housing funds raised by the tax?
The housing funds raised will be managed at the city level to support new or existing housing initiatives and/or partnerships.
Who has oversight of the air support funds raised by the tax?
The air support funds raised are administered by the Sun Valley Air Service Board (SVASB) under a Joint Powers Agreement (JPA). Its purpose is to direct and oversee the use of the dedicated LOT for AIR service and destination management/air support, as directed by the respective cities. SVASB has four members:
Ketchum Mayor – Neil Bradshaw
Sun Valley Mayor – Peter Hendricks
Hailey Mayor – Martha Burke
Blaine County Commissioner – Muffy Davis (ex-officio)
Per the JPA, SVASB has no staff (each of the cities utilizes their staff for various SVASB tasks) and minimal operating expense. www.svairserviceboard.org
The Sun Valley Air Service Board has Contracts for Services with three local non-profit organizations:
Fly Sun Valley Alliance for air service development/improvement
Visit Sun Valley for destination management/promotional air support
The Chamber of Hailey and the Wood River Valley
These organizations closely coordinate efforts and provide regular reporting to the SVASB regarding activities and results.
What is Fly Sun Valley Alliance?
Fly Sun Valley Alliance is the valley’s only non-profit 501c6 economic development organization focused on improving commercial air service for the Wood River Valley to benefit the community. The FSVA operates with a 14-member volunteer board of directors representing private and public sectors throughout the valley, and one staff member. FSVA has been working with Sun Valley Resort and other partners for over two decades to improve air service to Friedman Memorial Airport (SUN). www.flysunvalleyalliance.com
What is Visit Sun Valley?
Visit Sun Valley is the destination marketing and management organization (DMMO) for the greater Sun Valley area. It was established to ensure the vitality of the local tourism industry through a steady, healthy, and sustainable flow of visitation to the area. This is achieved through consistent, long-term, and highly targeted communication and outreach efforts that operate in a nimble manner according to the economic environment. The organization’s ultimate goal is to continue to target visitors who are attracted to and share in the values and attributes of our amazing Valley in an effort to maintain the unique mountain culture and quality of life that is so cherished by this community.
Archived/Pre 2023 Vote FAQs for Reference
Why reallocate half of the revenue from the LOT for AIR sales tax to housing?
The LOT for AIR is now generating significantly more revenue than when it was first enacted by voter approval in 2014. In addition, the airline program at Friedman Memorial Airport (SUN) has also been steadily generating more passengers, thereby reducing the overall amount needed to pay the airlines in Minimum Revenue Guarentee (MRG) contracts. There is still a need for airline MRG contracts to preserve and support SUN air service, but it can be successfully done with 0.5% LOT funding level.
What is the 1% LOT for AIR?
First approved by voters in 2013 and renewed for another five-year period in 2017, the Local Option Sales Tax for Air (LOT for AIR) generates funds for air service development and destination management/air support. Hailey voters reapproved the tax in 2020. In Ketchum and Sun Valley, the LOT for Air expires on December 31, 2023.
Voters in Ketchum, Sun Valley and Hailey are being asked to approve these initiatives on May 16, 2023. The ballot measures in each city call for voters to approve a reallocation of the tax proceeds to 0.5% for housing and 0.5% for air service support.
In Ketchum and Sun Valley, the LOT for Air & Housing will have a five-year renewal beginning on July 1, 2023. In Hailey, the measure will extend this LOT until 2050.
The ballot measures in each city also call for voters to approve a reallocation of the tax proceeds to 0.5% for housing and 0.5% for air service support.
Why not put the LOT for AIR tax entirely towards housing?
Housing is a critical need countywide, but consistent and dependable air service is also very important to our community and tourist economy. Many residents and their families depend on reliable air service to key cities. Air service surveys tell us that 22% of air travelers to/from Friedman Memorial Airport (SUN) are locals, and 30% of air travelers are friends and family of locals. Overall, including second homeowners, 54% of SUN air travelers have a connection to the Wood River Valley.
Fly Sun Valley Alliance and Visit Sun Valley are in support of reducing the amount of LOT revenue towards air service to 0.5%, reserving half of the funds to preserve our air service through MRG (Minimum Revenue Guarantees) and promotion to fill seats and reduce MRG costs.
How many votes do we need to be successful?
We need 60% of registered voters in Ketchum, Sun Valley, and Hailey to approve the ballot measures (vote YES for Housing and Air).
When is the vote?
Election day is Tuesday, May 16, 2023 at your regular polling location. Early (in-person) voting will be available starting May 1 at the Blaine County Courthouse. Absentee voting (vote by mail) is available, but you must be registered to vote at least 30 days before the election (April 19) and you must request your mail-in ballot at least 11 days prior to the election (May 5) and it must be returned by May 16.
How can I help?
Canvas (door-to-door advocacy)
Display a yard sign
Donate: Online contributions can be made from a link on our website. Checks may be made out to “Yes for Housing and Air” and received anytime to Molly Page. Please call Molly at 208-720-4187 to make arrangements.
What have been the benefits of the LOT for AIR to date?
Since 2014, the LOT for AIR has provided the resources to improve air service at Friedman Memorial Airport (SUN) and flight reliability, positively impacting our economy and quality of life for local residents.
Our community now has improved convenience with more flights to more destinations – from 3 to 6 nonstop routes – and more year-round air service.
Attracted new airline to serve SUN (United) – and new E175 regional jet service
Secured new nonstop flights from Denver (DEN), San Francisco (SFO) and Chicago (ORD)
Extended service to Denver (DEN) and Seattle (SEA) from seasonal to year-round
Extended service to Los Angeles (LAX) and San Francisco (SFO) into fall
Supported year-round daily service to Salt Lake City (SLC)
Supported winter diversion busing for SUN passengers until reliability was improved
Supported improved winter flight reliability through new airport approach procedure (95+% avg SUN winter flight completion rate now, up from 73% in 2019)
Why a five-year renewal for the LOT for AIR?
Continuing to maintain successful partnerships with airlines is key to retaining and improving air service. Renewing the LOT for AIR will preserve and support air service for our community and guests.
Renewing the LOT for AIR for another five years will allow our community to:
Retain our current flight routes
Improve frequency and convenience for air travel year-round
Sustain our local economy, local businesses, local jobs and quality of life
How important is tourism to our local economy?
Tourism represents 73% of Blaine County’s GDP.
Tourism annually generates $355 million in visitor spending; $34 million in local tax revenue.
Tourism provides 5,100 jobs in Blaine County that are directly related to visitor spending.
Community Housing is vitally important for Blaine County’s tourism economy
Sources: 1) 2018 Analysis, SV Economic Development 2) 2021 Idaho Travel Impact Study
How are the revenues from the LOT for AIR used?
Funds from this tax are dedicated to air service contracts/MRGs (Minimum Revenue Guarantees), air service development efforts, and destination management/air support. Historically, approximately 50% of the LOT for AIR funds have been used for air service and 50% are used for destination.
FY23 Fly Sun Valley Alliance 1% LOT BUDGET
FY23 FSVA 1% LOT BUDGET PRESENTATION
FY21 FSVA 1% LOT FINANCIAL REPORT
FY23 Visit Sun Valley 1% LOT BUDGET
FY23 VSV 1% LOT BUDGET PRESENTATION
FY21 VSV ANNUAL REPORT
What other private sector partners support air service?
The Sun Valley Resort plays a big role in supporting air service – paying 50% of airline contract MRG costs to FSVA and providing additional efforts to market and promote air service. The Sun Valley Board of Realtors also supports FSVA’s air service efforts through their Realtors for Air program.
Why are some of the LOT for AIR funds used for promotion/destination management?
As a resort area, tourism is a key driver of our economy and supports many aspects of our wonderful quality of life, including a variety of events, amenities, local businesses, and transportation, including Mountain Rides bussing and Friedman Memorial air service access. SUN air passenger surveys show that 66% of SUN passengers are visitors. So, while the number of local resident travelers using air service out of SUN has grown significantly over the past decade, we could not retain our current level of air service solely with local resident travelers. Visitors are essential to fill airplane seats and sustain our local economy.
Visit Sun Valley provides destination management, visitor information, and promotion services for the Sun Valley area, balancing supply and demand. Additionally, they take the necessary steps to ensure tourism adds value to a destination community and that visitors are well educated on local community resources, culture, and values. Visit Sun Valley works to manage many aspects of the destination including promotion efforts, local resources, accommodation, activities, events, environmental concerns, attractions, and transportation.
Why does our community need to contract for air service?
In many smaller and/or seasonal communities, airlines require that a certain level of financial risk mitigation be guaranteed to provide service, typically in the form of an MRG (Minimum Revenue Guarantee) contract. The community that wants the service for its residents and guests shares the financial risk with the airline that would not otherwise service the community. FSVA currently has MRG contracts with United and Alaska Airlines.
Airline MRG contracts are often required by many airlines to serve small, seasonal destinations such as SUN. Other cities have these types of MRG airline contracts to secure flights – from resort areas like Jackson Hole, Telluride, Vail, Steamboat, and Crested Butte to larger cities across the U.S. Even small cities, such as Twin Falls, Pocatello, Lewiston, Idaho Falls and Cheyenne, currently have MRG contracts to retain air service.
Read: TIME article on communities keeping air service through MRG airline contracts
U.S. airlines are struggling to serve small markets and rural airports. U.S. airlines are significantly reducing service. MRG contracts have allowed us to secure/retain good service at SUN.
How do airline contracts/MRGs work?
MRGs are a contract for future performance, and the final cost is determined after a contract period is closed. An MRG contract obliges the airline to share detailed flight data before FSVA makes a payment. An MRG contract induces service by putting a floor on the performance of a flight but pays less when the flight does well. In good times, load factors are high, the local economy benefits, and MRG costs go down. In recession, load factors are low, MRG costs increase, and locals benefit from flights that would otherwise be cancelled.
The amount owed to the airline at the end of the contract period (typically one season or one year) is the shortfall between the actual revenue generated and the minimum revenue needed by the airline to cover the cost of the flight. FSVA’s airline contracts are both seasonal and annual, depending on the airline. The airline contracts include a strict confidentiality clause for competitive reasons.
Example: FSVA contracts with an airline for a $500K MRG cap for a summer season of daily nonstop service, which represents the airline’s identified potential shortfall between actual revenue and cost. At the end of the season, if total revenues fall short of actual cost by $300K, FSVA would owe the airlines the $300K. On the other hand, if the total revenue shortfall on the flights was $550K, FSVA would owe the airlines just the $500K contract cap. If the actual revenue produced met or exceeded the cost, FSVA would owe $0.
